On January 20, 2026, the cryptocurrency market experienced a sharp deleveraging event. More than 182,000 traders had their positions forced closed, totaling over $1.08 billion in liquidations. Long positions accounted for nearly all the losses as Bitcoin and Ethereum futures traders were hit by cascading margin calls.
Traders are now confronting higher leverage amid intensifying global macroeconomic pressures and technical weakness across digital assets.
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Record Liquidations Hammer Leveraged Traders
According to CoinGlass data, 182,729 traders were liquidated over the 24-hour period ending January 20, with combined losses totaling $1.08 billion. Most were long positions, totaling $1.08 billion, while short liquidations were far lower at $79.67 million.
Bitcoin saw $427.06 million in liquidated longs, with Ethereum following at $374.47 million. The largest single liquidation on Bitget involved a BTCUSDT_UMCBL position valued at $13.52 million. Major exchanges reported significant losses: Hyperliquid had $132.39 million in long liquidations, Bybit $91.35 million, and Binance $64.08 million over a four-hour period.
Liquidation occurs when an exchange closes a trader’s leveraged position because the margin is insufficient to cover losses. As prices move against highly leveraged positions, exchanges automatically sell collateral, resulting in a cascade as each liquidation pushes prices lower and triggers further margin calls.
High-profile traders were hit hard. Machi Big Brother, a well-known investor, suffered five liquidations in a single day. His total losses reached $24.18 million, and his remaining 2,200 ETH, valued at $6.67 million, faces further risk if Ethereum drops to $2,991.43.
Technical Weakness and Market Stress Signals
Several market indicators showed clear stress beyond falling prices. Technical analysis found that most altcoins are trading with a daily Relative Strength Index (RSI) below 50, a signal of ongoing selling pressure. The RSI ranges from 0 to 100; values below 50 indicate bearish sentiment.
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Technical indicators showing RSI below 50 and elevated liquidation ratios. Source: AlphractalThe liquidations-to-open-interest ratio over the past 24 hours remained high across much of the market, indicating clear deleveraging. This ratio, which measures the share of open positions liquidated, spikes during periods of stress and forced selling.
These repeated liquidations have drained investor capital, making it harder for traders to re-enter the market at lower prices. This can cause a self-reinforcing downward spiral as the pool of buyers shrinks when demand is most needed to steady prices.
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Rising Global Liquidity Threats Intensify Market Pressure
Beyond crypto’s own challenges, macroeconomic events are amplifying market volatility. Japan’s bond market saw a dramatic shift on January 20: 30-year Japanese Government Bond (JGB) yields jumped 25 basis points to 3.86%, while 10-year yields moved up 8 basis points to 2.34%. Both figures set modern records for Japanese sovereign debt.
Sharp rise in Japanese Government Bond yields to record levels (Source: Ole S. Hansen)This shift in yields has far-reaching effects. Low Japanese yields have anchored global liquidity for decades, fueling the carry trade, in which investors borrow yen at low rates to invest in higher-yielding assets, including cryptocurrencies.
However, rising Japanese yields have made keeping these positions much more costly. As a result, capital is moving back into Japan and away from riskier assets, such as crypto. The Bank of Japan has limited options: controlling yields could weaken the yen, while a tighter policy may distort markets or erode confidence. Either way, global liquidity conditions are tightening.
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Additional pressure comes from the World Economic Forum in Davos, where policy discussions may introduce more regulatory uncertainty. The annual event often creates market ripples, especially for cryptocurrencies, as the asset class remains under closer regulatory scrutiny worldwide.
Continued Volatility Likely Ahead for Crypto Markets
Technical weakness, depleted capital from leveraged traders, and tightening global liquidity all point to continuing uncertainty. Short-term volatility may increase as markets digest higher Japanese yields and any signals from Davos.
Highly leveraged traders remain exposed. When conditions deteriorate, exchanges liquidate positions automatically to limit risk—often wiping out trader capital completely. The crypto community calls this outcome “rekt,” a slang term for “wrecked.”
Effective risk management is crucial when liquidation and stress ratios are high. Still, unattractive conditions and capital exhaustion may limit buying, keeping prices under pressure until either lower prices attract new capital or macro trends ease.
The next several days will reveal if crypto markets can absorb this turmoil or whether more liquidation waves will follow as global financial conditions change.
Source: https://beincrypto.com/crypto-liquidations-market-volatility-2026/
